1937

Guest Post by Sven Henrich

We’ve talked about the year 2000 comparison (Party like it’s 1999). In 2020 markets went onto a similar structural tear just having rammed relentlessly higher. In 2000 markets famously topped in March following the Fed’s Y2K inspired liquidity injections in 1999 as markets had vastly disconnected from fundamental reality. Now that the truth is out we also know that markets are now vastly disconnected from fundamentals.

And the 2000 comparisons still hold water on a number of measures, price to sales, price to ebitda, market cap to GDP and of course relative weightings in favor of the few as the rally continues to narrow.

The top 2 stocks now have gone complete vertical especially as it relates to their weighting in the S&P:

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1936 Convention – 2016 Convention – Will 2017 be like 1937?

1936 Convention

Perhaps it is just cyclical, but the Cleveland Republican Convention will be the first time that city has held a political convention since the fateful 1936 election just prior to the 1937 peak in the recovery from the Great Depression. This has the potential to be very bad for the city insofar as it will expose the downside of how unions destroy their own jobs by getting out-of-touch with the real boss – the consumer. The unions always see this as them against a corporation and fail to understand that if they price themselves out of a job, it is because the consumer is not buying it.

RMS_Queen_Mary_20Jun1945_NewYork

Once upon a time, New York City was the main port. The union demands were abusive and eventually the port of New York came to an end. There can be no monopoly be it a corporation or labor for the ultimate decision-maker is always the consumer.

1968 Democratic Convention Police AbuseThe prospect of Republican nomination going nuts remains rather high. We may yet see riots if Trump is denied the nomination evoking the memories of violent Chicago’s 1968 Democratic convention when backroom deals by kingmakers determined the nominee and that led to fistfights on the floors that stained the city as image for a decade as the events were broadcast worldwide.

The 1968 Democratic Chicago Convention saw massive protests about Vietnam. We are in an upward cycle now for civil unrest. We may begin to see a lot more chaos around the upcoming Presidential election from those trying to stop Trump and the silent majority who are supporting Trump against the corrupt insiders.

There was a major change in trend in 1937. It appears we are headed for that same change in trend come 2017.

We have 40% of Trump supporters say they will abandon the Republican Party and 30% of Sander’s supporters say they would never vote for Hillary. This is illustrating there is a tremendous amount of the political base on both sides that is just dissatisfied for politics as we know it today. By the time we come to 2018, this will grow to a nightmare for Washington insiders.


WHY THIS FEELS LIKE A DEPRESSION FOR MOST PEOPLE

“And the little screaming fact that sounds through all history: repression works only to strengthen and knit the repressed.” John Steinbeck, The Grapes of Wrath

Everyone has seen the pictures of the unemployed waiting in soup lines during the Great Depression. When you try to tell a propaganda believing, willfully ignorant, mainstream media watching, math challenged consumer we are in the midst of a Greater Depression, they act as if you’ve lost your mind. They will immediately bluster about the 5.1% unemployment rate, record corporate profits, and stock market near all-time highs. The cognitive dissonance of these people is only exceeded by their inability to understand basic mathematical concepts.

The reason you don’t see huge lines of people waiting in soup lines during this Greater Depression is because the government has figured out how to disguise suffering through modern technology. During the height of the Great Depression in 1933, there were 12.8 million Americans unemployed. These were the men pictured in the soup lines. Today, there are 46 million Americans in an electronic soup kitchen line, as their food is distributed through EBT cards (with that angel of mercy JP Morgan reaping billions in profits by processing the transactions).

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INFLATION INDIGESTION

Below are restaurant menus from 1937. They reveal the truth about government reported inflation figures. According to the BLS, the CPI in 2014 was 232.8. According to the BLS, the CPI in 1937 was 14.4. It’s bad enough that the dollar has lost 94% of its purchasing power since 1937 according to these government drones, but those figures are an outright lie.

The menus below show you what restaurant food items actually cost in 1937. In case you were confused, all the numbers are in CENTS, not dollars. I picked out the most common food item on the first menu. A hamburger with onions cost 15 cents in 1937. If the BLS inflation figures were accurate that hamburger should cost 16 times as much today. That would be $2.40.

Avalon was recently in NYC and went to your standard pub called Quinn’s Bar & Grill. I’ve pulled up their menu on the link below:

http://www.viewmenu.com/quinns-bar-and-grill/menu?ref=google

A hamburger in NYC costs $12.00 today, not $2.40. That is 80 times the cost in 1937. This is slightly different than the BLS figures. Do you believe the government or your own two eyes?

It is fortunate for the Federal Reserve and the bankers running this country that the populace is so dumbed down and unaware of how man made inflation has destroyed their lives, while enriching a chosen few. Henry Ford was right in the 1930s and these menus reveal the truth of his words.

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Via The Great Depression of 2006

The first 3 pictures are from the Manhattan  Restaurant

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